On Tuesday, 1 July 2014 Bird & Bird were pleased to have Ben Morgan, Joint Head of Bribery & Corruption at the UK Serious Fraud Office, to speak at one of our regular breakfast briefings for the aerospace and defence industry. Recently the Crime and Courts Act 2013 has enabled the SFO and CPS to propose and seek judicial authority to enter into Deferred Prosecution Agreements (DPAs) with businesses that are suspected of certain financial and related crimes.
DPAs have emerged in recent years as a major law enforcement tool in the United States, particular in cases of alleged bribery, and our briefing opened with Scott Maberry, partner in the International Trade and Investigations team at US firm Sheppard Mullin, describing the evolution in the US of a recognised process with many standard conditions. Scott then outlined strategic considerations for conducting investigations and settlement negotiations under a DPA regime. Patrick Gilfillan, Senior Associate at Bird & Bird, then presented the UK statutory structure, the limitations on the jurisdiction, the process for negotiating a DPA with the prosecutor and securing Court approval. In the US all DPAs are submitted for Court approval despite the absence of any specific requirement or indeed any statutory underpinning other than the prosecutor's obligation to ensure "faithful execution" of the law. It is well known that the UK judiciary disapprove of any suggestion that prosecutor and defendant may in effect agree a plea bargain, so a judicial approval process is embedded into the UK legislation. Patrick concluded with the new guidelines issued by the UK Sentencing Council – a subject which has attracted much commentary.
Ben Morgan then presented the SFO's position: "Deferred Prosecution Agreements: What Do We Know So Far?" The text of his speech is available here. The points we noted as interesting were:
- The reinforcement of the message that SFO's role is primarily as a prosecutor, and that DPAs will not be suitable in all cases;
- Nevertheless, there was considerable emphasis on the willingness of the SFO to engage seriously in the correct case where the business in question genuinely co-operates, and that in that situation there should be a reasonable degree of certainty as to the outcome;
- Businesses and their advisers do need a change of mindset, in that the changes to the SFO's range of investigative tools increases the likelihood of detection of corrupt behaviour;
- Genuine co-operation, and not "the impression of co-operation", is essential. Speed of engagement is vital rather than waiting for a lengthy investigation, particularly not one which results in the company's lawyers spinning the conclusions. Co-operation will be evidenced by telling the prosecutor something they don't know. The SFO want to be able to interview witnesses at a very early stage without them having been coached. But the emphasis is very firmly on access to the facts – the SFO does not expect co-operation to extend to providing the prosecutor with the legal advice the company has received.
Simon Phippard, Of Counsel in Bird & Bird's Dispute Resolution practice, chaired the seminar, which concluded with lively questions. The delegate pack is available and includes the slides used by Scott and Patrick. We are also preparing a Knowhow brief for this area. Please contact Rafi Youngerwood or Patrick Gilfillan if you would like to receive a copy of this.